Does anybody remember blockbuster?

Are movie theaters heading for the same junk heap?


According to the WSJ

Movie theaters are reeling from a very disappointing summer season.

The summer 2017 season has been defined by big-budget movies that failed to live up to their massive marketing campaigns.

A steady stream of lackluster major releases …  has depressed moviegoing in the U.S. and Canada, where admissions are down about 5% so far this year. Revenues are down 2.9%, with slightly higher ticket prices making up for some of the attendance drop.


Theater chain execs attribute the decline to the lackluster movie releases.

But, investors are starting to wonder if the industry is being fundamentally disrupted …


Everybody knows that movie theaters are facing heavy competition from home theaters.

Why sit in the dark with an auditorium of strangers chomping on overpriced popcorn when you can conveniently sit around with family and friends eating and drinking whatever you please, more cheaply?

The answer, of course, is “presentation” and content.

Home theaters still can’t replicate an IMAX experience, and some movies (think: Star Wars) are way better with wide screens and industrial-blasting surround sound.

But, the typical comedy or love story doesn’t get much from a theater’s “production values”.


So, it boils down to content, right?

Traditionally, theaters got exclusive rights to show movies for at least a couple of months.

But, that “window of exclusivity” is shrinking —  often done to weeks, sometimes down to days, and occasionally eliminated with  simultaneous multi-channel release to theaters, Netflix, Amazon, etc.

So, unless folks have a burning desire to see a movie on opening day (again, think: Star Wars) , they can wait a short while and stream it at home.


And, the streamers now one-up the theaters with their own original content.

That content is exclusive to the streamers (i.e. not available in theaters) and is often delivered in an addictive serial format (i.e. as a linked series, not a single event).


Finally, there are the fundamental consumer economics.

If it’s not part of a subscription, a streamed movie costs about the same as a single admission  … and that cost is amortized over all the friends and family sitting in front of the big screen TV.

Save on gas, save on food, spread the ticket price … that’s a pretty good deal.


Years ago, Blockbuster was on fire.

Then, Netflix squashed them.

Now, looks like movie theaters are heading to the junk heap.

It’s called “creative destruction… it’s part of business life (and death).



Follow on Twitter @KenHoma            >> Latest Posts

One Response to “Does anybody remember blockbuster?”

  1. Andrew Yang Says:

    Perhaps it’s the “London Jets” case for our modern times!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: